​The curious case of NSA & Indo-US relations

Jhinuk Chowdhury is a former journalist based in India and is currently working as an independent writer. She has worked as a business correspondent for the leading Indian daily – The Times of India – covering human resources, IT, jobs and careers.
You can follow her on Twitter @jhinuk28.

The US could be anticipating billions of dollars in new deals as India lifts its foreign direct investment cap on the defense sector to 49 percent, which it announced in the annual budget for 2014-15.

Though not unlikely, the road towards a closer alliance with
India – economic or strategic – might call for a lot of effort on
America’s part to patch an edgy past with new Prime Minister
Narendra Modi, who in 2005 was denied diplomatic visa to enter US
on account of allegation of Modi’s role in the 2002 communal
riots in his home state, Gujarat.

Nine years on and the tables have turned completely with Modi
being elected as prime minster of the world’s largest democracy
with a resounding mandate. The business mood in India is buoyant
as the markets and the country’s currency march towards near
stability.

The annual budget was presented, which opened up many key sectors
– railways, insurance, not to mention defense – for foreign
investment with resilient growth ambition of 5.4–5.9 percent for
2014-15 and further taking it to 7-8 percent in 2015-16.

The US sees India – predicted to emerge as the world's
third-largest economy by 2050 – at the nib of a significant
transformation under the growth-focused Modi government and it
wants a share, not just of economics, but also strategic
advantages of using a strong India to counter the Chinese growth
or in American terms creating a better Asian ‘balance’.

As Harsh V. Pant, professor of International relations at King's
College London, points out, “The US has been doing its best
to reach out to Modi and his government. India is key to the US’
ability to create a stable balance of power in the larger
Indo-Pacific and at a time of resource constraints, it needs
partners like India to shore up its sagging credibility in the
region in face of Chinese onslaught.”

But just as Washington was preparing for a bilateral Indo-US meet
in September following an invitation from President Obama to Modi, a
rather embarrassing revelation surfaces: the US allegedly
allowing the NSA to scout on Modi’s Bharatiya Janata Party (BJP)
in 2010.

Apparently the NSA acquired the necessary certifications from the
Foreign Intelligence Surveillance Court (FISA) of the US to cast
its prying eyes on around 193 countries and organizations
worldwide, including India’s BJP, the Pakistan People's Party and
Egypt's Muslim Brotherhood, among others.

An infuriated India, calling the alleged incident
“unacceptable,” summoned a senior US diplomat seeking an
explanation for the report and assurances that “this would
not happen again.”

BJP’s next generation leaders – crack the code

But 2010 was a rather unlikely period to pry on BJP which was in
the opposition then. And what is the rationale of putting the
party in a club with the likes of Egypt's Muslim Brotherhood?

South and Southeast Asia expert from the Woodrow Wilson
International Center Michael Kugelman points out that this is a
very strange group of political parties that represent very
different ideological bents.

“One might think that the BJP was targeted because of its
conservative, hard-line orientation—but then you have Pakistan’s
PPP, seen as one of that nation’s most liberal, quasi-secular
parties, included in the surveillance as well. I imagine the BJP
was targeted because the US wanted more information on the party
leading India’s next government—and the party whose leader,
Narendra Modi, isn’t very well understood or known in the
US,” he says.

“The US for the last few years has been expecting a change of
power in Delhi, but did not really know the second generation of
BJP leaders. Washington has been very familiar with the
Vajpayee-Advani generation of BJP leaders, but the BJP in the
last 10 years has been undergoing a transformation and Washington
was not really able to keep pace,” Plant adds.

A lucrative & strategic proposition

Political observers in the US are advocating steps from the Obama
administration to demonstrate genuine intent of revitalizing
relations with the Modi government. Some suggest supporting an Indian entry to the
Asia-Pacific Economic Cooperation Forum (APEC) could be a good
starting point, not just to revitalize relationship but also use
it as a prelude to include Indian into the Trans-Pacific Partnership (TPP).

This serves US in two ways. First, as India expands it ties with
its neighborhood and the greater Southeast Asian region, its
inclusion into APEC will mean better access to the region for US.
Second, while in a bilateral relationship it gets to negotiate
deals harder, as member of the APEC India will be bound by
multilateral commitment to perpetuate easing of market access.

A case in point is the Bilateral Investment Treaty (BIT) that is
being negotiated with India, which took a hit after the Indian precondition that
Indian courts will have the final say on commercial disputes that
arise under the bilateral investment treaty.

The stakes are too lucrative for US to let go which is expecting
to grow its current bilateral trade from about $100 billion to
$500 billion under the Modi regime. The liberalized defense
sector has upped its expenditure to $38.35 billion. Studies show
that India’s defense spending will be comparable to that of the
US and China in the next 30 years.

Boeing's vice-president of international business development in
Defense, Space & Security, Lt. Gen. Jeff Kohler, was quoted as saying that at 49 percent, India
will see more investment from US companies.

India, which depends on imports for 70 percent of its weapons, is
the world’s largest arms importer. However at present US accounts
for only 7 percent of the total arms supplies to India compared
to 75 percent that India has imported from Russia in 2009 and
2013.

Enhancement of India’s defense capabilities also serves strategic
purposes for the US. Stronger combat capabilities of India amount
to a stronger and independent Asian partner for the US that can
counter China.

As Kugelman points out, “India plays a key role in the US
rebalance to Asia because New Delhi, like Washington, wants to
address China’s rise and growing influence throughout Pacific
Asia. The US and India already enjoy considerable security
cooperation — particularly on maritime levels — across the
broader Asia theater, as demonstrated by several years of joint
military exercises in key strategic waterways. Washington views
India as a key partner in the rebalance to Asia.”

However though India is cautiously watching the rise of China,
when it comes to playing up Narendra Modi with China, things can
get little tricky for the US.

Unlike the decade-long standoff in the relationship with
Washington, Modi has been enjoying Chinese patronage, who have invested in his state
extensively since his chief ministerial days. A recent act of
bonhomie was demonstrated with China targeting to invest $1 billion in Gujarat.

So while Modi had expressed his discontent over border security
issues with China during his election campaign, most likely he
will engage with China at independent levels.

As for the snooping bit, though a pragmatic Modi might move on
because of the benefits of partnering with the US, political
thinkers say the association will always be taken with a dose of
caution. As Neelam Deo, director of foreign policy think-tank
Gateway House, says, “India is a big country, with its own
strategic objectives and imperatives and it will act on
opportunities where interests converge, as it has done in the
past.”

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.